By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Japanese stocks on Thursday rallied to their highest level since the March 2011 earthquake as hopes for a policy stimulus and a weakened yen spurred buyers, while gains in other regional markets were capped amid worries related to the U.S. fiscal cliff.
The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.39% climbed 0.9% to 10,322.98, a closing level it hasn’t seen since March 10, 2011, one day before a massive earthquake and tsunami devastated the country.
Elsewhere in the region, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.09% rose 0.4% and Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.33% added 0.3% as the markets reopened for the first time since Monday.
/zigman2/quotes/210561789/realtime/sampled USDJPY 111.5800, +0.0230, +0.0206%
Taiwan’s Taiex inched up 0.2% and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% gained 0.3%, while China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -0.06% fell 0.6%.
The advance in Tokyo marked a third straight day of gains, and came as the yen stayed close to its lowest level since September 2010 against the U.S. dollar.
“The message from Japan is clear at the moment, the incoming government will do everything in its power to weaken the yen and stimulate the economy,” said Stan Shamu, market strategist at IG Markets.
He noted that Prime Minister Shinzo Abe has already made comments on setting an inflation target of 2%, maintaining dollar-yen level /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0206% in the ¥85-¥90 range, and appointing a Bank of Japan Governor whose views were aligned to those of the government.
Also, Japan’s newly-elected government won’t abide by a ceiling on bond issuances when it decides on the size of an upcoming supplementary budget, aimed at providing a stimulus to the ailing economy, Finance Minister Taro Aso said, according to media reports. Read more about Aso’s remarks.
Among the stocks rising, Honda Motor Co. /zigman2/quotes/207173990/composite HMC -1.02% /zigman2/quotes/200490352/delayed JP:7267 -0.07% climbed 1.6% and Mitsubishi Motors Corp. /zigman2/quotes/202404490/delayed JP:7211 -0.25% /zigman2/quotes/200876874/delayed MMTOF -0.82% jumped 6.2%, while Panasonic Corp. /zigman2/quotes/201785256/delayed JP:6752 +0.50% added 1.4%.
U.S. to hit debt ceiling on Monday
The Treasury Department says the U.S. is on track to hit the debt ceiling by Monday, setting in motion steps that might buy the government time before it faces a debt crisis.
Toyota Motor Corp. /zigman2/quotes/200537742/composite TM -0.05% /zigman2/quotes/203803129/delayed JP:7203 +1.10% climbed 2.6%. The rise came even as the Wall Street Journal and other news reports said the auto giant has agreed to pay $1.1 billion to settle a class-action lawsuit related to a malfunction that caused unintended acceleration. Read more about the settlement.
Among financials, Nomura Holdings Inc. /zigman2/quotes/207276383/composite NMR -1.38% /zigman2/quotes/206251373/delayed JP:8604 -0.46% climbed 4.3% and Mizuho Financial Group Inc. /zigman2/quotes/204507985/delayed JP:8411 +0.25% /zigman2/quotes/200950467/composite MFG -0.71% rose 1.3%.
The broad regional gains, meanwhile, came despite extended losses overnight on Wall Street, as shares of retailers were hit after the holiday and as investors focused on the resumption of budget talks. Read U.S. Market Snapshot.
Several mining and metal shares in the region advanced, with Zhaojin Mining Industry Co. /zigman2/quotes/203361399/delayed HK:1818 +3.26% /zigman2/quotes/200275285/delayed ZHAOF +0.77% rising 0.8% and Aluminum Corp. of China Ltd. /zigman2/quotes/208051344/composite ACH +1.23% /zigman2/quotes/202960704/delayed HK:2600 +0.44% gaining 0.6% in Hong Kong.
In Sydney, Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO -0.46% /zigman2/quotes/202627887/composite RIO +0.79% climbed 0.9% and Fortescue Metals Group Ltd. /zigman2/quotes/202351558/delayed AU:FMG -1.23% advanced 4.1%.
But on mainland Chinese bourses, the resource and financial sectors declined, paring gains recorded earlier in the week.
Shares of Jiangxi Copper Co. /zigman2/quotes/201334192/delayed CN:600362 +0.13% slipped 1.2% and Zijin Mining Group Co. /zigman2/quotes/203833875/delayed CN:601899 +2.40% /zigman2/quotes/209836076/delayed ZIJMF +4.95% slid 0.8%, while China Minsheng Banking Corp. /zigman2/quotes/203910009/delayed CN:600016 -0.51% /zigman2/quotes/200749234/delayed CMAKY -7.99% shed 1.4% and China Life Insurance Co. /zigman2/quotes/206573290/composite LFC -0.56% /zigman2/quotes/204766889/delayed CN:601628 +0.66% fell 0.6%. All four stocks are up by at least 1.2% in the week to Thursday’s close.